Would Allow Increase Amount Small Businesses Can Expense, Free Up Capital for New Investments
Washington, DC - Colorado U.S. Senator Michael Bennet today introduced a bill to provide tax relief to small businesses by increasing the amount of costs for capital equipment they can expense, or write off, in a given year. The higher cap would help small businesses free up capital quicker to invest in new purchases and help grow their businesses and the economy.
"We can strengthen our economy by strengthening small businesses and giving them more tools to continue to grow, invest, and innovate," Bennet said. "Colorado's small businesses make up almost 98 percent of employers in the state and employ about half of the state's private workforce. This bill is one step we can take to ensure our tax code will protect their ability to create jobs and spur the economy."
Section 179 of the tax code allows small businesses to expense, or write off, the costs of certain capital equipment in the year that they place it into service rather than depreciating it over time. Currently, the amount they can expense is capped at $25,000. In recent years, Congress has temporarily increased that amount to $500,000-often retroactively.
Bennet's Small Business Expensing Act would permanently raise the expensing limit to $1 million. Establishing a permanent cap will provide small businesses with more predictability and considerably raising the cap will free up access to much need capital for entrepreneurs to invest and grow.
In March, Bennet passed an amendment to the Senate's nonbinding budget instructing Congress to make this update to the tax code. The amendment passed without objection indicating key support in the Senate.
# # #